The final budget for 2014-15 is expected to be presented in the first week of July. ET takes a look at the tax issues the budget needs to address:

INDIRECT TAXES

Goods and services tax (GST) BJP has indicated indirect tax reform will be its priority.

What can be expected

A road map to roll out the big indirect tax reform A strong statement promising to address all concerns of states. A strong statement promising to address all concerns of states Reduction in CST rateCentral sales tax was to be abolished with introduction of GST.

What can be expected

CST rate could be lowered to 1% from 2% along with the announcement of GST.

One-time settlement scheme to end previous backlog A forward looking plan to reduce litigation. A forward looking plan to reduce litigationCenvat credit reforms Current regime is complex and limited. It adds to cost and administrative burden. What can be expected

Recommendations of MK Gupta committee available Some measures can be expected based on the recommendations. Some measures can be expected based on the recommendations Stimulus through excise cuts Industrial and manufacturing revival tops government agenda.

What can be expected

Selective sops to stimulate demand till economy improves.

DIRECT TAXES

Retrospective tax FM has opposed amendments with retrospective affect but has not said on specific amendment.

What can be expected

The budget could clarify that amendment would have prospective affect Apart from Vodafone, it would benefit other MNCs as well. Direct taxes code The code is ready and can be passed quickly.